Hunt’s Seven-Year Fixed Loan Combines The Financial Power Of Large Institutions With The Attention Of Smaller Lenders
Banks continue to be hesitant when approving loans, despite claims from industry professionals citing capital market optimism. Borrowers still have to look for alternatives.
Hunt Mortgage Group, a leading national provider of agency loans for both traditional and affordable multifamily properties, is launching a seven-year fixed-rate loan program. Backed by multifamily and commercial real estate properties for acquisitions or refinancing, borrowers nationwide will have access to loans from $7.5M to $25M.
The program allows Hunt to use funding sources outside of conduit debt providers like Fannie Mae and Freddie Mac and keeps loan servicing in Hunt's hands through the life of the loan, ensuring consistent customer support.
In the past, securitized lending was not an option lenders other than the largest banks could provide. Despite being a smaller company, Hunt has the ability to offer borrowers a product they would normally have to acquire from larger institutions.
Hunt’s new program launches in a economic climate where traditional lending has stagnated, despite promises from the Trump administration to pull back on regulations. Data from the Federal Reserve revealed lending in February was flat.
Hunt Mortgage Group’s proprietary loans provide a more reliable option. Beginning in 2014, Hunt's products have quickly grown to finance most commercial asset classes. Borrowers also have the ability to lock in interest rate spreads for a seven-day period during the application process, in addition to a 45-day period from the receipt of an executed loan application until it closes.
“This new loan product enables us to expand our stabilized lending products beyond our robust agency programs," said Mike Becktel, managing director and head of proprietary lending at Hunt. "This fixed product offers a unique financing option with a spread lock, surety of close and continuity with Hunt Mortgage Group for the life of the loan.”
Large institutions will often sell loans to B-piece buyers, investors who purchase subordinate bonds in a Certified Mortgage Backed Securities deal. The change of hands can be frustrating for developers who have to speak to a different company if they need to sign a lease or make modifications to financing. Any relationship created with the original lender is replaced with a new and unknown third party.
Keeping the loan in-house ensures it is guaranteed to be approved once the application is filed. CMBS loans work when a bank bundles constituents into a pool. Buyers interested in the package can subject loans to a third-party credit review. If the buyer does not like the purpose of a particular loan in the bundle, the application can be denied.
Because Hunt is not selling the loan, there is no risk that it would not close.
The initial capital earmarked for the program is $300M. As customer demand grows, more money is expected to be set aside for borrowers.
To learn more about this Bisnow content partner, click here.
